Jun 09, 2017 - 4:18pm

The Finkel Review offers a valuable plan to improve our energy system, but governments need to recognise that weak climate policy would undermine the Finkel plan’s ability to deliver electricity that is cleaner, cheaper and more secure, said The Climate Institute today.

The Finkel review recommendations provide a comprehensive blueprint for a smoother energy transition. Recommendations include a Clean Energy Target, a mandatory 3-year notice period for generators before they retire, and an emissions reduction pathway out to 2050.

“The Clean Energy Target can bring in cleaner energy and help reduce prices, but it’s not enough on its own,” said Olivia Kember, Acting CEO The Climate Institute.

“If the federal government sets up a Clean Energy Target, it should be combined with a strategy to make sure coal station retirements are predictable, manageable and consistent with our climate goals.”

The Finkel Review models a Clean Energy Target capable of reducing emissions in the electricity sector of 26-28 per cent by 2030, the same reduction as the government’s target for all national emissions. However, it notes that “it may be appropriate” for emissions reductions in electricity to be a greater percentage cut than the national target

“It’s absolutely clear that aiming for 28 per cent emissions reductions in electricity isn’t enough. For a start, reducing emissions in electricity is much easier than reducing emissions from agriculture and parts of industry, so the smart way to meet a national emissions reduction target is to make deeper emissions cuts in the power sector so that those other sectors have a bit of room,” said Kember.

“Secondly, under the Paris Agreement which Australia signed up to along with 195 other countries, the long-term goal is to limit temperature rise to 1.5-2°C,”said Kember. “That means net zero emissions by 2050, and so 28% by 2030 just doesn’t take us far enough along the path to net zero”.

“And thirdly, investors know the goal is net zero so they recognise that anything less maintains a level of uncertainty that is unhelpful for efficient investment and lowest costs for consumers.”

The Climate Institute’s Switch in Time research showed that targeting 28 per cent emissions reductions in electricity used up over 90 per cent of a sectoral carbon budget consistent with the global 2°C goal. This meant that much more disruptive and drastic change was needed to reduce emissions after 2030.

“The Finkel plan gives us the ingredients for a successful energy transition .It’s now up to governments to respond with a policy package that keeps prices low and the lights on, and puts us on a path to net zero emissions.”